Taxes

Foreign companies become liable for VAT in Switzerland with an annual turnover of over CHF 100,000 and must settle accounts via a local fiscal representative. The fiscal representative minimizes administrative effort and accelerates the import of goods.

Foreign companies become liable for VAT in Switzerland with a turnover over CHF 100,000 and require a locally based fiscal representative. This representative takes over the tax registrations and enables the reclaiming of input taxes.

The Federal Court classified capital gains from company sales as taxable wages if the seller remains employed. This limits the principle of tax-free capital gains and poses risks for young entrepreneurs.

In Switzerland, natural persons are subject to income tax, which is levied at the federal level as well as in the cantons and municipalities. Individuals become liable for tax through personal or economic ties to Switzerland, such as through residence or employment.

Whether income from pension provisions is taxable is defined by the form of payment (annuity or lump sum); annuities are fully taxable in Switzerland. Contributions to mandatory social insurance are tax-deductible, with annuities and one-time lump sum payments being taxed differently.

Income from self-employed activity includes ordinary and extraordinary income and determines the taxable profit (Art. 18 para. 1 DBG). Ordinary income comes from the core business, while extraordinary income results from asset realizations.

Home ownership and rental income must be declared as taxable income, with the imputed rental value being relevant for owner-occupiers. Maintenance costs can either be deducted as a flat rate or based on actual expenses.

Income from private assets such as dividends is taxable and must be declared in the tax return. Income and possible participation deductions must be entered in the securities directory.

Income from non-independent employment must be taxed, although certain professional expenses are deductible. These include travel, meal expenses, and further education costs, but not general living expenses.